Supply Source: LycoRed: The Evolution of a Nutritional Solutions Provider

LycoRed: The Evolution of a Nutritional Solutions Provider

From its humble beginnings as a lycopene start-up with about five employees, LycoRed (Beer-Sheva, Israel) today has become a $60 million company with numerous em-ployees, maintaining a virtual arsenal of natural carotenoids like lycopene, lutein, beta carotene and zeaxanthin. The company has grown organically over the last several years to increase its offerings to the nutraceuticals industry globally. And, according to Scott Larkin, vice president of marketing and business development, this is only the beginning.

The company made its first acquisition(s) in the late 1990s with Nutriblend and Biodar, which enabled it to expand into production of microencapsulated ingredients, vitamins and mineral premixes and integrated fortification solutions. This development helped it become a formidable player in the supplement industry and functional foods market.

The hunt for other acquisitions again picked up steam in late 2005 when it bought Buckton Scott, a well-established distributor and supplier in the realm of nutritional ingredients. In mid-2006, the company purchased the assets and business of H. Reisman, which brought LycoRed additional expertise in value-added carotenoid formulations and manufacturing.

For LycoRed it all started with the science first and then commercialization of ingredients. In fact, its flagship ingredient, Lyc-O-Mato and tomato lycopene, have been the subject of close to 100 studies throughout the years in the areas of antioxidant function, as well as heart, prostate and skin health.

“Some of the latest product highlights include Tomat-O-Red natural color and Lyco-Lutein. The latter product, natural lutein, fits in very well with our carotenoid offerings,” Mr. Larkin said. Tomat-O-Red is a product that has been gaining a lot of visibility in the marketplace because of its “natural” positioning. It derives its color from tomato lycopene and delivers fortification health benefits along with vibrant color. According to LycoRed, unlike other natural food colorants, LycoRed colorants show no signs of color shift during processing or pasteurization, which is an important advantage. Tomat-O-Red is particularly suitable for beverages, especially juices, smoothies and sports drinks. Mr. Larkin sees Tomat-O-Red being a major growth driver in 2007.

As LycoRed established the lyco-pene category in the 1990s, it started to ramp up branding efforts with Lyc-O-Mato. Since then the company has been very proactive with the consumer. “The challenge these days is getting consumers to listen to your message when they are bombarded with health and a myriad of other messaging on a daily basis,” Mr. Larkin pointed out. “The economics of the situation are also difficult to contend with because we work in a disposable income marketplace. In other words, consumers don’t really need our products—they are seen as ‘luxury’ items by many consumers. So how do you convince them to pick your ingredient(s) over other ingredients and make them part of their daily health supplementation regimen? This is what we have been working hard to understand over the years.”

Lycored has undertaken a massive campaign to educate consumers directly through radio and consumer print advertising. It currently makes 750 million impressions on consumers 35 and older on 9000 radio stations across the U.S. The four most recent radio spots highlight the unique health attributes of Lyc-O-Mato. As far as consumer print advertising, LycoRed reaches out to consumers through numerous publications like Natural Health, Body & Soul, Newsweek and Psychology Today.

Now and for the future, LycoRed will continue to use its science base and proactive marketing to convince consumers that its products provide the nutrition solutions they are looking for. As LycoRed seeks to improve the health of consumers, it too will seek to improve the health of its bottom line. —R.W.

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